Jeffries’ ‘Greed and Fear’ Strategist Threatens Bitcoin with Quantum Risk
Investment bank Jefferies' longtime “Greed and Fear” strategist Christopher Wood has reportedly removed bitcoin from his core model portfolio, citing growing concerns that advances in quantum computing could undermine the cryptocurrency's long-term security.
According to a report by Bloomberg, Wood said in the latest Greed and Fear newsletter that the first 10% Bitcoin (BTC) allocation in late 2020 has been replaced by a diversified position in physical gold and gold mining stocks.
He argued that Quantum's findings undermine the idea that bitcoin is a safe store of value for retirement-style investors.
Wood added that quantum risk concerns are rising among long-term and institutional investors, with some capital allocations now warning that they will question bitcoin's storage value if quantum timelines are compressed.
He said he fears that sooner-than-expected “cryptographically relevant” machines could allow attackers to extract private keys from exposed public keys, weakening the cryptographic data that backs Bitcoin's balances and mining rewards and, at worst, challenging its role as “digital gold” for retirement-style portfolios.
Quantum risk enters mainstream portfolios.
The quantum issue has been debated among developers and commentators for years, but Wood's move shows how it is now influencing key asset allocation decisions at major brokerages and research houses.
RELATED: Ethereum Must Pass ‘Walk Test' To Endurance For 100 Years: Buterin
Castle Island Ventures partner and Bitcoin advocate Nick Carter warned of the quantum issue in December, warning that “capital is concerned and needs a solution” to the quantum threat, although many developers, including Blockstream CEO Adam Bakke, doubt it's a problem in the near future.
Macro analyst Luke Gromen has also been cautious on Bitcoin in recent months, citing macro and technological uncertainties, including the threat of quantum computing, as reasons to add gold exposure to BTC in a multi-cycle view.
Research from firms such as EY and PwC similarly points to quantum computing as a threat to traditional public key cryptography and warns that financial systems, including those backing digital assets, should develop migration paths for quantum-resistant alternatives.
Magazine: Kevin O'Leary Says Attacking Quantum Bitcoin Is A Waste Of Time
Developers say Bitcoin has time to adapt
Bitcoin developers and major infrastructure developers push back against the idea that quantum leaps are an immediate threat.
Blockstream CEO Adam Back has repeatedly argued that breaking Bitcoin's current signature schemes could be 20–40 years away, and that the network will have plenty of time to migrate to post-quantum signature algorithms and better key management practices before any real-world breaks are implemented.
Other analysts, including the a16z researcher, similarly conclude that there is little chance of a “cryptographically relevant” quantum computer capable of breaking today's public key systems within this decade.
The biggest recent risks come from implementation errors, governance and “harvest now, decrypt later” attacks directly on blockchain signatures rather than attacks on encrypted data.
